Estée Lauder Companies (ELC) has reported a strong finish to its 2026 financial year, with net sales rising 5% to reach US$15bn.
Gross profit also increased 7% to $11.3bn, up from $10.5bn reported last year, as fragrance and skin care led growth and the company benefited from US tariff refunds.
During the fiscal 2026 fourth quarter, the ELC submitted claims for a portion of its eligible International Emergency Economic Powers Act (IEEPA) tariffs paid and began to receive refunds.
This follows a Supreme Court ruling that US President Donald Trump had incorrectly used the IIEEPA to levy the double-digit tariffs, prompting companies to sue the US Government and claim back the costs.
ELC recorded a $38m benefit in cost of sales from refunds received during the fiscal 2026 fourth quarter, which partially offset the full-year gross impact of incremental tariffs of $102m.
Elsewhere, make-up faced ongoing profitability pressures, which were offset by the ELC benefit from increased prestige beauty share in key markets.
This included Mainland China, which saw value share gains in the fiscal 2026 fourth quarter and full year, with the full-year driven by fragrance, skin care and make-up.
ELC also saw a boom in prestige demand in South Korea, with Q4 retail sales growth accelerating to double-digits and driven by make-up and skin care.
The MAC Cosmetics-owner also expanded its consumer coverage in 2026 on Amazon, reaching 13 brands across 11 markets, as well as TikTok Shop, now with 12 brands across nine markets.
“I am incredibly proud of our team for delivering fiscal 2026 results ahead of the expectations we had to start the year,” said Stéphane de La Faverie, President and CEO.
“We reignited growth with organic sales rising 3%, driven by the breadth of growth across brands, and achieved significant operating margin expansion.
“We are delivering on all aspects of ‘Beauty Reimagined’.
“Our One ELC operating model is increasingly enabling the entire organisation to move at speed and with discipline.”
How Estée Lauder Companies’ core categories performed in 2026
Skin care net sales increased 4%, primarily driven by growth from La Mer, The Ordinary and Estée Lauder.
Net sales growth from La Mer benefited from Rejuvenating Eye Cream and existing product lines, such as The Treatment Lotion and The Moisturizing Soft Cream.
Fragrance, meanwhile, saw a 10% sales rise due to double-digit growth from the ELCs Luxury Brands led by Le Labo, Tom Ford and Kilian Paris.
Net sales growth from Le Labo was primarily driven by its Classic Collection, including the launch of Violette 30.
In terms of make-up, net sales came in largely flat, bolstered by growth from MAC Cosmetics’ launch into beauty retailer Sephora and Tom Ford, which offset declines from Bobbi Brown and Too Faced.
ELC claimed the growth also reflected the “continued success” from the lip subcategory, fuelled by hero products including Powder Kiss Lipstick product franchise and Lip Pencil.
Net sales declined at Too Faced due to continued retail softness for the brand and an unfavourable comparison to higher shipments in the prior year.
Hair care fared worse, decreasing 1% due to declines from Aveda, but was largely offset by growth from The Ordinary.
La Faverie added: “For fiscal 2027, we are affirming our confidence to accelerate organic sales growth.
“In addition, we are raising our outlook for an even stronger adjusted operating margin, as we double down on our strengths to further diversify growth across product categories and geographies, including accelerating growth in North America.”
Related content:
- Has Estée Lauder Companies decided against selling Dr. Jart+, Too Faced and Smashbox?
- Analysis: Estée Lauder Companies’ underperforming brands amid portfolio review
- MUA Bobbi Brown claims last two years at namesake brand left her ‘miserable’
- Too Faced founders exit after 24 years
- Estée Lauder Companies restructuring costs rise again to $1.75 billion
- Estée Lauder Companies hails ‘milestone’ moment in restructuring efforts
- Too Faced Cosmetics founders launch incubator Toy Box Brands
- Beauty’s highest paid CEO salaries revealed: L’Oréal, Shiseido, Coty and more
